EXCHANGE RATE

Waipa Post, Volume 47, Issue 3359, 26 August 1933, Page 12

EXCHANGE RATE

MAINTENANCE OF PRESENT LEVEL SUPPORTED

The hope that the Government would maintain the high exchange rate of 25 per cent., New Zealand on London, until an international agreement on currency had been reached to permit of a substantial rise in wholesale prices, was expressed in the report of the executive presented to the annual meeting of the Canterbury Sheep Owners' Union on Wednesday evening. "This much-debated question was settled during the year, the Government agreeing to lift the exchange level 15 per cent, above the rate ruling last season, thus giving an exchange of 25 per cent, to New Zealand on London," the report said. "The effect of this has been to place Dominion exporters on a par with their competitors on the British market, and has removed the handicap under which .New Zealand exports were working as compared with Australia, the Argentine, etc. "Unfortunately, world prices suffered a further decline, including those for the produce of our competitors, and relatively speaking, oui: prices in New Zealand money did not appear to have advanced in the expected proportion to the lift in exchange. Had the exchange rate not been lifted, however, the position of the New Zealand primary producer would have been relatively worse, namely, 15 per cent. "Your executive trusts that it will be found possible to maintain at least the present level until such time as an international arrangement has been made to fix the golc 1 content of the various national currencies at such a level as will allow of a substantial lift in wholesale prices, especially of raw materials, and that it may be found possible to arrange an international exchange bank or clearing house, the function of which shall be the minimising of exchange fluctuations as between the trading nations of the world, and which should be made possible through the fixation of the gold content of national currencies previously mentioned. It is hoped that some such understanding between trading countries will be found to be possible as a result of the discussions now taking place."